TIOL-DDT 2069 · the untouched capture
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<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17063"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong><font color="#663399" size="3">TIOL-DDT 2069 </font><br>
</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>20.03.2013 <br>
Wednesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Stay applications not meaningless formalities - High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a recent judgement, the Bombay High Court observed, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"Applications for stay cannot be treated by the assessing officers or for that matter by appellate authorities as meaningless formalities. Quasi-judicial authorities have to apply their mind in an objective and dispassionate manner to the merits of each application for stay. While the interest of the Revenue has to be protected, it is necessary for assessing officers to realize that fairness to the assessee is an intrinsic element of the quasi-judicial function conferred upon them by law. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Applications for stay must be disposed of at an early date. Such applications cannot be kept pending to obviate compliance with the need to evaluate the contentions of the assessee until after monies are recovered using the coercive arm of the law. Appellate authorities must set down time schedules for disposal of stay applications with reasonable expedition. The manner in which recourse has been made to the coercive process of law, leaves much to be desired and we are of the view that the action which was pursued was completely high handed and arbitrary."</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though
this was in relation to an Income Tax case, it should apply to all taxes.
Remember just one Circular from the CBEC in the New Year drove thousands
of assessees to various High Courts. Hopefully the crazy recovery menace
will come to an end in another ten days.</font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See
<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2013/2013-TIOL-120-HC-MUM-IT.htm"><font size="1">2013-TIOL-120-HC-MUM-IT </font></a> </font></strong></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Mid-Quarter monetary policy review: March 2013 - Repo rate reduced </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI </strong>has reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.75 per cent to 7.5 per cent with immediate effect and consequently the reverse repo rate under the LAF stands adjusted to 6.5 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 8.5 per cent with immediate effect. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India's GDP growth in Q3 of 2012-13, at 4.5 per cent, was the weakest in the last 15 quarters. What is worrisome is that the services sector growth, hitherto the mainstay of overall growth, has also decelerated to its slowest pace in a decade. While overall industrial production growth turned positive in January, capital goods production and mining activity continued to contract. The composite purchasing managers' index (PMI) declined in February, largely reflecting slower expansion in services. In the agriculture sector, the second advance estimates of kharif production indicate a decline in relation to the level last year. However, that may be offset, at least partly, by the rabi output for which sowing has been satisfactory. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The year-on-year headline WPI inflation edged up to 6.8 per cent in February 2013 from 6.6 per cent in January, essentially reflecting the upward revisions effected to administered prices of petroleum products. On the other hand, non-food manufactured products inflation, and its momentum, continued to ebb along the trajectory that began in September 2012, enabled by softening prices of metals, textiles and rubber products. Worryingly, retail inflation continued on the upward path that set in from October 2012, with the new combined (rural and urban) CPI (Base: 2010=100) inflation at a high of 10.9 per cent in February 2013 on sustained price pressures from food items, especially cereals and proteins. Consequently, the divergence between wholesale and consumer price inflation continued to widen during the year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Union Budget for 2013-14 has made a firm commitment to fiscal consolidation. According to the revised budget estimates for 2012-13, the gross fiscal deficit (GFD)-GDP ratio, at 5.2 per cent, was contained around its budgeted level, mainly by scaling down plan and capital expenditures. The GFD-GDP ratio is programmed to decline to 4.8 per cent in 2013-14 and further down to 3.0 per cent by 2016-17, in line with the revised road map for fiscal consolidation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_1565.htm">RBI Press Release : 2012-2013/1565, Dated March 19 2013</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Since applicant has not complied with order of pre-deposit within due date, cost imposed for restoration of appeal</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>applicant was directed by the CESTAT to make pre-deposit of Service Tax of Rs.19,89,336/- within a period of eight weeks and report compliance on 03/09/2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the case came up on 03/09/2012, the appellant did not comply with the order and, therefore, the appeal was dismissed and the appellant was given liberty to apply for restoration, in case they make the pre-deposit within a period of ten weeks from 03/09/2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant did not comply with this <em>largesse </em> too and paid the pre-deposit amount almost two months from the extended period for compliance, on 16/01/2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Surprisingly, the Board Circular <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2013/excircular967.htm" target="_blank">967</a> </strong> was not pressed into operation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the appellant is before the CESTAT and prays that their appeal be restored. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench observed - </font></p>
<blockquote>
<p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"4. Inasmuch as the appellant has not complied with the interim order passed by the Tribunal even during the extended period, some condition has to be put for restoration of the appeal. Accordingly, we direct the appellant to pay cost of Rs.10,000/- within two weeks from today to the account of Commissioner of Central Excise, Thane-I and report compliance on 12 th March, 2013. On such payment cost, the appeal shall be restored to its original number."</em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See
<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2013/2013-TIOL-480-CESTAT-MUM.htm" target="_blank"><font size="1">2013-TIOL-480-CESTAT-MUM </font></a></strong> </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Inferring that excess credit has been taken by recalculating CENVAT credit based on price charged by registered dealer is not sustainable </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant took CENVAT credit on the strength of invoice issued by registered dealer.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the invoice, in addition to particulars of goods being sent to the appellant, the dealer also mentioned particulars of duty payment, quantity and value of goods received from the original manufacturer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Although the amount of duty paid per unit quantity of the goods by the original manufacturer on pro-rata basis could easily be calculated from the particulars of the original manufacturers, the lower authorities recalculated the amount of duty paid per unit quantity on the basis of the value charged by the dealer to the appellant and <strong>inferred </strong> that the appellant has taken excess CENVAT credit on the said inputs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Too complicated, one may say, but that is how the lower formation acted, probably without even ascertaining as to what was the quantum of CENVAT credit actually taken by the appellant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyways, we presume that the Commissioner(A) found this too fuzzy to interfere and he upheld the demand against the appellant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT after hearing both sides observed - </font></p>
<blockquote>
<p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"4. It is not in dispute that whatever duty has been paid by the appellant, they have taken the credit of the same. As per provisions of CENVAT Credit Rules, 2004 assessee is entitled to take credit of the duty paid. In these circumstances, the allegation of excess credit taken by the appellant is not sustainable. Accordingly, impugned order is set aside, appeal is allowed with consequential relief."</em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See
<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2013/2013-TIOL-479-CESTAT-MUM.htm"><font size="1">2013-TIOL-479-CESTAT-MUM </font></a> </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs Officer Steals Containers </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> seems a Customs Officer was approached by an importer for help in clearing two containers declared to contain tables. The Customs officer took a decent bribe, faked a transfer of the containers to another port and stole the two containers. It seems officers routinely steal imported luxury cars from ports. Well, this happened in Ghana. </font></p>
<p align="center"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_promotion.jpg" alt="" width="530" height="443" hspace="5" border="0" align="center"></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Thursday's cases</font></strong></font></strong></font></p>
<p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></font><font color="#FF6633">Import of Toyota car - When there is a cloud in documents produced, Tribunal had rightly refused to accept the same - order of Tribunal based on its factual finding need not be interfered with especially when Revenue has not placed any other material to contradict such factual findings - Revenue Appeal dismissed: High Court </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Toyota HI LUX SURI car was imported and cleared under a Bill of Entry dated 21.1.1998. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On a specific intelligence that the said car was imported using false documents and was being used by one Abdul Razak, the DRI, Calicut directed Abdul Razak to produce the vehicle before them. On 22.2.2000, Abdul Razak produced the said vehicle and he was also subjected to a detailed examination. Consequently, the vehicle was seized under a Mahazar on the reasonable belief that the same was imported in contravention of the provisions of the Customs Act 1962. By an order dated 12.10.2004 the Tribunal set aside the order of the lower authorities and so the Revenue is before the High Court. </font></p>
<p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether for purpose of provisions of Sec 50C, valuation of sold plot of land can be modified if it is a distress sale - NO: ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>assessee had sold a portion of the land of its factory property for a consideration of Rs.2,22,64,409/ which was as per the sale deed. At the same time, the guideline value adopted by the registering authority was Rs.3,95,91,000/-. In the computation of LCTG the assessee adopted the consideration at Rs.2,22,64,409/-. But, the AO held that the guideline value of Rs.3,95,91,000/- must be adopted. The (DVO) valued the property at Rs.3,54,73,536/- But the Valuation Report was not available before completing the assessment. The AO completed by adopting the guideline value of Rs.3,95,91,000/-. The CIT(A) determined the consideration at Rs.2.25 crores. </font></p>
<p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Rule 2(l) of CCR, 2004 - CENVAT credit - Services utilized for erection and installation of Ammonia Storage Tank at port are Input Services: High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT </strong>would be farfetched to interpret Rule 2(l) to mean that only two categories of services in relation to inputs viz. for the procurement of inputs and for the inward transportation of inputs were intended to be brought within the purview of Rule 2(l). Rule 2(l) must be read in its entirety. The Tribunal has placed an interpretation which runs contrary to the plain and literal meaning of the words used in Rule 2(l). Moreover, whereas Rule 3(1) allows a manufacturer of final products to take credit of excise duty and service tax among others paid on any input or capital goods received in the factory of manufacture of the final product, insofar as any input service is concerned, the only stipulation is that it should be received by the manufacturer of the final product. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Tomorrow for the judgements </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrowwith more <strong>DDT </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Have a Nice Day </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font><font size="2"><strong></strong></font></p>
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